With the news of Facebook posting
positive quarterly results derived mostly from ads, the company can celebrate
and dish out a few ‘I told you so’ messages to analysts across the media
landscape as many were quick to descend on Facebook after a number of high
profile companies abandoned its ad service. Now, fueled by mobile ads,
Facebook has seen resurgence after recording a 25.6% in share price and posting
$333m in profit[1].

Most of the triumph is owed to
the performance of mobile ads on it platform as it “made up 41% of advertising
revenue for 2013 first quarter[2].
It was feared that Facebook wouldn't be able to make online advertising work and
for some time it looked like it wasn't but recent results indicate that the
social media giant has finally managed to master it role as “conduit between
users and brands”[3].

However, while Facebook’s
second has been impressive, there may be problems ahead as despite the growth
of its ads operation, user engagement with ad placements are poor to say the
least as “ 76.4 percent of Facebook’s users say they “never” or “rarely”
click on advertisements or sponsored listings”[4].
This would seem to be damning for a company that relies on ad revenue but as always,
where there is a negative, a positive is not far behind.

While Facebook users and net users writ large
don’t engage with ad content, Facebook could, according to IBT’s Lisa Mahapatra, Facebook bring in an extra £170m annually just by charging it users
to avoid being hassled by ads “If only 10 percent of Facebook’s U.S. and Canada
users opted out of ads at the low cost of $1/month”[5].

10 percent is a realistic
number but it doesn't cancel the vast number of Facebook users who are less
than hot about coughing up as according to a poll conducted by Greenlight, 85%
of users “would not pay” to “use Facebook without ads”[6].
However, Facebook could get more users to pay to use an ad free Facebook as The Drum reported that 15% of users would “pay more than $5 to see no ads”[7].

In sum, Facebook has proved critics
wrong it has been able to make ads pay in an age that is still quite skeptical about whether ads can work on then net due to a clear ambivalence toward online
ads by net users. However, Facebook even have an opportunity to capitalize on
the widespread dislike of online ads which means Facebook cannot lose which is
good news for a company that can profit from the hatred towards its main source
of profit.

All markets reach a nadir due
to an increase competition or lack of demand and the smartphone market look
like it’s just reached its own peak. While Apple managed record iPhones sales of
$31m which may signal that there is still significant demand for smartphones in
a crowded market, the actions of the market leaders may indicate something else
in entirely[1].

Samsung’s second quarter sales
effectively doubled that of Apple’s yet the South Korean electronics company is
looking invest it capital into other sections of it business particularly memory
chips “used in personal computers and mobile devices”[2].
This decision is clearly moulded by Samsung realizing that the smartphone
market is starting to slow due to a growing number of competitors and weaker
demand especially in developed countries
as “penetration for smartphones is
between 75-85 percent in developed markets, meaning a saturation point could be
reached as early as 2014”[3].

What this means for the future
is that we may see a substantial drop in the price of smartphones or at least
see the release of model that at last cater to the lower end of the marketplace.
Looking at Apple’s example, it quite clear that the magic pill of innovation as
far as the smartphone market is concerned is obsolete as for the last three
years, Apple have been effectively re-releasing flagship models and Samsung merely
making minor aesthetic changes to theirs.

What we will also see alongside
a drop in price will be clear focus in penetrating emerging where smartphone is
much lower. This may suit both companies as cheaper models will cheap to make
despite being obvious need to sell more in order to ensure growth. Marketing
costs will be cheaper which is good news for smartphone makers as apart from
actually making smartphones, marketing them is among one of their biggest
costs. However for Samsung the slowdown of the smartphone market has more
implications for them than most as “two thirds” of its business is dependent in
how it does in smartphone marketplace[4].
Any decline severe decline in sales or profit is taken by investor as a cue to get
bearish.

In sum, all markets reach a
point of saturation some quicker than most but for Samsung and Apple, they can
only hope that the Smartphone market can deft the laws of the marketplace for
sometime yet.

Thursday, July 25, 2013

While there has been much lip
service lended of late to the current trend of the decline of Apple’s dominance
in the smartphone and tablet markets and it’s less than encouraging stock
market performance, the question that really should be asked or addressed is
when Apple going to launch a new product that always used to get them out of trouble
and stave off competition. While losing a whopping 22% in revenue in in one quarter shouldn’t inspire muck-eating
grins at any department at Apple HQ, a drop from 8.8bn to 6.9bn in real numbers
is nothing to panic about[1].

Despite all the focus on the
slight decline in sales due to leading two increasingly competitive markets,
Apple still has a sound business that has for two decades straight have defied
the laws of the marketplace through genius level innovation, marketing and
design. But notably since the death of its iconic founder and CEO Steve Jobs,
the company has failed to stick to it main strengths that has kept ahead of its
competitors for so long with Apple launching glorified updates of existing
models for the last three years.

This notable lack of innovation
in the last few years has been underlined by its competition making inroads
into its dominant position in the smartphone and tablet markets, two markets
Apple have had a large hand in creating in the first place. However not all
Apple’s recent problem end and begin with its noted stagnation as far as
innovation is concerned but with the savvy and market prowess of its
competitors. For years, Apple competitors have lagged behind due to the company
freakishly consistent habit of innovating its way out of trouble but now with
the lack of innovative new products, the business nous and smart pricing of its
competitors are now becoming key factors as to why Apple in experiencing a
slight decline.

What Steve Jobs understood and
Tim Cook must by now know better than the back of his hand is that the tech
industry, much like the music industry, is that a hit will solve all problems
and a hit for Apple is an innovative product launch. This is why it is important
to judge any product launch by Apple in the near future by its success or
failure but the company willingness to take a risk and innovate and avoid
rehashing successful models of the past. Apple, as with much of modern life,
has fallen into the trap of rehashing old hits instead of trying to innovate
which has been at the heart of its success.

While numbers are at the heart
of most business, the tech industry, maybe except the music and movie business,
real currency and source of any real success is the ability to innovate and effectively
change the world as business and all processes that come with are only the
means to an end.

In sum, Apple are now more than
any time in the last three decades subject to the laws of the marketplace, a
marketplace they have managed to defy for the best part of two decades through
genius level innovation, marketing and design. Now Apple, who seem to forgot
the secret to their success for so long have fallen into the trap of rehashing
old models which has seen their competitors eat into their dominant position in
the smartphone and tablet markets. If Apple are to make a strong return to
dominance, it must regain its trademark spirit of innovation that made it the
company what it is today and be prepared to take risk that have made the
company a cultural as well as business entity recognised and admired across the
globe.

Tuesday, July 16, 2013

In what has been a frustrating
summer with Manchester United failing to land any major targets, the club looks
to make it biggest coup of the summer yet with capture of former Arsenal captain
Cesc Fabregas.

It’s needless to say that the
capture of the Barcelona midfielder would represent good business as he will
solve united long term problem of a distinct lack of creativity in the middle
of the park and will link well with former Arsenal cohort Robin Van Persie.
However, as always, there are obstacles in the way of that happening, the first
being whether he wants to move in the first place.

While reports suggest that
Fabregas has been less than happy with the fact that has struggled to find
place in Barca manager Tito Vilanova’s first team plans, he has publicly stated
his intention to stay at the clubs citing that talk of his departure as “completely
absurd”[1].
If the fact that Fabregas has expressed his desire to stay at the Nou Camp wasn’t
enough of an obstacle, the fact that Arsenal have “first refusal” should the Catalan
giants decide to end the midfielders stay and sell him[2].

Barcelona have already rejected
Man united £26m bid insisting that Fabregas “is not for sale” which could force
Man United to up their offer or look elsewhere to boost their threadbare
midfield options[3].
However, if Fabregas was to make some simple calculation of what might be
better for his career considering that he is not likely to figure in Barca’s
first team plans as much as he would like and with World Cup 2014 on the
horizon, his chances of appearing on the first team sheet in game 1 of Spain’s
World Cup 2014 Campaign are much better served being Man United playmaker in
chief than Barcelona benchboy[4].

In sum, Man united may have
other names they are looking to add to the squad but the signing of Cesc
Fabregas, should it happen, may the most important signing of the next five
years.

The Trayvon Martin/George
Zimmerman trial was brought to an end with a tragic but remarkably predictable
ending, George Zimmerman walking free. Of course, George Zimmerman will never
be “free” for as long as he lives as he will always be known as the man who
killed a boy and got away with it. He will probably have invest heavily in
personal security and get used to long and dirty looks from people as well as
threats and actual attempts on his life.

While it is right that
President Barack Obama and a number of public figures and religious leaders
have stressed calm in the wake of protests and public outrage over the verdict,
Zimmerman has to come to the fact that despite 12 of his peers found him
innocent, huge swathes of a nation 310 million strong would beg to differ.

The non-guilty verdict in some
sense was never in doubt and all you needed to know to find out how sure this
verdict was down line was to watch TV coverage and see how bad a job the
prosecution were doing in proving intent. Also another signal that the Martin
family were not going to get justice was the attitude Zimmerman’s defence had
throughout the case.

It’s not uncommon for lawyers to be confident
in a case they are confident enough to try and prove in open court but I’ll
doubt there is a lawyer in this world with enough confidence in his case to
start his opening argument with a “knock, Knock” joke. Every time his defence
made an appearance in the press, they had the swagger suggesting that the case
was in the bag and the rest of the case was just a formality as the prosecution
failed to make their case starting with the disastrous witness testimony of the
clearly nervous and un-prepped Rachel Jeantel and letting Zimmerman’s defence
control the narrative of the trial.

For all the fanfare of the
trial, the aftermath of the trial regardless of the verdict is more important
than the trial itself as a nation got to reflect on the big issues that
underline the case, the most apparent being guns and race. The twittersphere
lit up in outrage in lieu of the verdict citing other injustices and the
unfairness of the ruling. In the physical world, there were widespread protests
across the nation that were largely peaceful despite reasonable worries that
all hell would break loose should Zimmerman be set free.

While Zimmerman maybe “free”,
it is certainly not the end as the NAACP have made their intent clear urging
the Department of Justice to launch an inquiry into the case. Whether the DOJ
will look into the case is questionable but the NAACP seems committed in seeing
the DOJ involved. This verdict as well the murder of Trayvon Martin was a
tragedy as while Zimmerman’s guilt couldn’t be proved beyond reasonable doubt,
Trayvon Martin’s death and his family grief goes beyond doubt altogether.

In sum, George Zimmerman was
found not guilty for the murder of Trayvon Martin as he will be the only person
who knew what exactly happened on that fateful February evening. But from what
we know, Zimmerman in the eyes of many is guilty for profiling Martin, stalking
him even when the cops told him to wait in his car till they showed up and
getting out the car to confront the youngster which in the eyes of the public
makes Zimmerman as guilty as sin as if he followed the advice of the cops and
stayed in his vechile, Martin would be alive and Zimmerman would not have to
watch his back as long as he lives for what he did.

Tuesday, July 9, 2013

With the rumored news of Apple
looking to release the Ipad 5 and the iPad Mini at a later date, it look like
the tech giant is looking to make the second half of this a better one than its
first. According to the Cult of Mac’s
Killian Bell, the source of this news comes from within the company’s supply
chain but warns that this rumor as with all rumors should be taken with “a
health helping of salt”[1]

However speaking in terms of
strategy, a new product release for the company couldn't come soon enough. With
competition heating up in the smartphone and tablet market and Apple
experiencing a slight decline of its share price, a product release, or even
the rumor of one, could take the pressure off. The iPad and iPhone maker have
invested heavily in marketing plunging over half a billion last year as has its
rivals such as Google and Amazon but despite an increase ad spend, Apple are
miles ahead in ad spend[2].

However the increase in
marketing between 2011 and 2012 seems to reveal a larger malaise that has
become more apparent of late that being Apple may be losing its famous ability
to innovate it way out of trouble. While it is safe to say that Apple chief
strength has been its ability to market its products, it has found it difficult
to market itself. There is nobody on the planet that does not recognize the
iconic Apple logo but people are starting to forget what that logo stands for. The
strength of Apple had over its competitors was ability to sell its values to
the point that it became more than a company simply looking to make money.

Apple have made some of the
most aesthetically pleasing products ever to grace a marketplace but never
really made the best products as the faults and glitches of it various products are infamous from the Ipod’s infuriatingly low battery life to the iPhone’s inability to run certain apps.
In Simon Sinek's excellent book,Start With Why: How Great Leaders Inspire Everyone To Take Action, Sinek explains that the power Apple had was that it addressed the
question of ‘why should I buy’ first before telling consumers what to buy[3].
Apple, for Sinek proved beyond doubt that “people do buy what you do, they but
why you do it”[4].
Apple still has this power but with death of Steve Jobs, the man who understood
Sinek’s point best, Apple has largely not used its ability to inspire a
purchase.

However with the rumored release
of the iPad 5, maybe Apple can tap into their ability inspire a purchase once
more.

Monday, July 8, 2013

It could be you..., not if you're parents got anything to do with it!!

With congress habitually
posting depressingly low approval numbers and the almost pathological American tradition
of not trusting government never mind their public representatives, it’s no
wonder why according to a poll published by Gallup that two

thirds of the
American public would advise their children not to choose politics as a profession[1].

Wednesday, July 3, 2013

“It is easy to imagine
the president from day one as walking a tightrope, on the other side is
survival, or at least as far as where his state stolen funds will take him when
the going gets tough, the audience watch with suspense some calling for
him to fall, some, reluctantly, encouraging balance, and the military
simultaneously encouraging him across while having a pair of scissors in one
hand and the other threatening to shake the rope”[1].

For all the faults of the Morsi
presidency from his less than democratic handling and drafting of the new Egyptian constitution
and his inability to bring stability to a country that has only known chaos for
the last two years, the likely event of Morsi getting ousted by the army after
it issued a threat imploring the president to either restore calm to the
streets of Egypt or face the possibility
of being ousted.

With the news of the conservatives being five points of the
Labour party according to the latest YouGov/Sunday Times poll, I think it’s
fair to say that Labour have paid the price of not attacking a coalition government that has floundered for most part
of its three years in power.

Labour have failed to
democratic how they will be different from the conservative led coalition as the
have often failed to make simple but devastating arguments that would have put
the conservatives on the back foot in policy debates. Instead for the last
three years all we have seen is Labour make the odd strong argument against the
conservative led coalition government on all issues except the ones that count.

Labour have largely been dithering in debates about spending
cuts as part of the government’s favoured austerity programme as George
Osborne, a far better political strategist than Chancellor, has managed to
browbeat the party into deliberation by moving to the right and the Labour
Party, often shirking the opportunity to make the key arguments against spending
cuts, has now stated that they will stick to the same spending policy as the
current government and not reserve any their cuts.

Despite the utter failure of the government’s policy of
austerity measures, the question to ask in the face of Labour leader Ed Milliband
and Shadow Chancellor Ed Balls effectively backing the policy position of the
current government is why? the only answer available is that they can’t and won’t.
Both Miliband and Balls were part of the last Labour government and share views
of the New Labour evangelists of moving the party to further to the right in
the quest of reach the centre of the political spectrum which would not be a
problem if they didn’t start every policy argument taking a less hawkish
position than the conservatives.

Whether the government should be making such large public
spending cuts at all is never debated, where to cut is, so is the speed of cuts
effectively making the whole nation approach a wholly political issue as a
bunch of managers looking for entry level staff to cull.

We often hear the comparison
often made by government looking to swing the scythe of the family who upon
falling on difficult times look to cut their expenses but obviously, government
cannot and should not be a family as a
family only have an obligation to its members while a government has an
obligation to a citizenry that bankroll it and , in theory, hold it to account.And should the public favour a growth focused economic
policy rather than the current policy in place that ineffectively tries to stop
the bleeding, the opposition should take
a position that establishes that they would be different in power rather than
try to establish ‘credibility’ by taking a slightly softer position than its
rivals in power.

In sum, Labour have largely failed to attack a coalition
government that has largely dithered in power and has overseen periods of negative
growth coupled with growth so miniature it’s hardly worth reporting. Thanks to
some smart strategy and the most vulgar use of the self /other distinction,
Labour have been backed into a corner and as always moved to the right rather
than making the counter argument and this pattern continue, Labour may end up being
thankful for being five points ahead instead of the 10 they have been
accustomed to for some time.